The Northern Ireland Government has announced plans to reduce the personal injury discount rate – a change the BMA has warned will ‘significantly increase’ GP indemnity costs.
The personal injury discount rate has remained at 2.5% in Northern Ireland since 2001, but the Department of Justice has said it will introduce a bill to change it to a new rate of -1.75% from 31 May.
The discount rate is used to calculate the final financial compensation for victims of serious personal injury according to the amount they can expect to earn by investing it.
Dr Alan Stout BMA NI GP committee chair, said in a statement that, if passed, the new law could have a ‘catastrophic effect’ on general practice in Northern Ireland, adding ‘this will significantly increase [personal indemnity] costs and the individual personal and financial risk that each GP carries’.
Unlike in other parts of the UK, GPs in Northern Ireland are not covered by a state-backed scheme and pay thousands of pounds a year to be covered for clinical negligence.
Dr Stout told Pulse that talks to secure state-backed indemnity for GPs in Northern Ireland have been ongoing for months, but said the outcome of the bill and the exact discount rate to be set ‘will influence exactly what any agreed scheme will look like’.
He added that if the discount rate does go to -1.75%, as proposed, this would ‘really force the issue’ regarding state-backed indemnity, as it ‘would make practices pretty unsustainable’.
In the statement, the BMA said the plans to change the personal injury discount rate will be ‘another factor putting junior doctors off becoming a GP’, making it harder to recruit, and urged the DOJ to address this issue and its potential impact urgently.
An NI Department of Justice spokesperson said: ‘The personal injury discount rate…is applied to give effect to the established legal principle of 100% compensation. This means that when setting the rate, the Department cannot take into account the costs to defendants.
They added that the Damages (Return on Investment) Bill, introduced to the Northern Ireland Assembly on 1 March, will change how the rate is set, but that the Committee has decided to request an extension, ‘which means the new system is unlikely to be in place until early 2022’.
The spokesperson added: ‘The discount rate will be reviewed again under the new framework, once the bill has been enacted. It is likely the discount rate will then increase from the proposed -1.75%.’
In England and Wales, the system was changed in 2019 so that state-backed schemes automatically cover all GPs if they are providing NHS services. In Scotland, indemnity costs are lower, and there is no state-backed scheme.
Last week, Pulse reported that GP locums in Wales have been told they will not be indemnified by the state unless they join a staff bank.